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franchise tag

With the deadline to designate franchise players just two days away, many NFL teams began the process today and designating their franchise players. The official franchise designations were made by the Cardinals, Steelers, and Panthers on Chandler Jones, Le’Veon Bell and Kawann Short. The Giants will also be tagging Jason Pierre-Paul but did not officially place the designation on him. None of the names thus far are a surprise. Continue reading NFL Franchise Tag Season Begins »

Had an interesting question today from a fan of the site regarding the odds that the Browns would use the Franchise Tag on Center Alex Mack. I thought it was an interesting topic to write about since it involves a number of considerations a team must make in regards to certain positions.

When the NFL instituted the Franchise Tag provision they grouped players into a number of positions. The tag itself is more or less calculated based on the top 5 salaries at the position, but due to the way the market and the game has changed over the years it has made the system in some way obsolete for some positions.

The NFL groups all offensive lineman and linebackers as their own individual price points. For linemen there has been a growing disparity between left tackles and the interior linemen on a team. In recent years teams have pulled back on spending on the guard and center position. For linebackers the 34 defensive system has become dominant and the 34 outside linebacker overshadows inside linebackers and 43 outside linebackers. It makes the decision to use the tag on the Guard, Center, Right Tackle, 43 outside linebacker, Inside linebacker, and 34 Defensive End (who is lumped in with pass rushers and in most cases they have a different role) very difficult. Here are my annual value estimates for the top 5 players at various positions on the offensive line:

Position

Salary

Left Tackle

$10,970,000

Right Tackle

$6,400,000

Guard

$8,020,000

Center

$6,990,000

As you can see this is a pretty major disparity. The Franchise tag in 2013 for an offensive lineman is $9.828 million. The largest salary cap hit for a Center in 2013 was $9.117 for Nick Mangold and the second highest just $6.5 million. So using a tag on a Center requires a heavy one year investment at a position that normally does not receive that type of salary.

The secondary concern is while most player dislike the tag because it offers no long term job security, it can be different for some of these other positions. If Mack was to be tagged and to run out and sign his tender the Browns are now locked in for the year at close to $10 million a season. Even if they come to a long term agreement following that, the $10 million figure will need to be worked into the contract.

I think many people consider Mack to be the best Center in the NFL. Financially that distinction belongs to Ryan Kalil at nearly $8.2 million a year, but the way the league has pulled back since then probably puts his pricetag closer to $7 million a year, which would be nearly $500,000 more a season than Max Unger. Once that tender is in play you are now going from a 4 year $28 million dollar contract to a 5 year $38 million dollar contract. That’s a major difference.

So financially there are many considerations that have to be taken both from a short and a long term perspective when using the tag on one of these secondary positions whose tag value is tied to a prime salaried position.

So I would think most teams would not consider using a tag on a Center. The Browns could be of a completely different mindset however. The team has over $20 million in cap room to carry over to 2014 and they will likely hit 2014 with nearly $45 million in salary cap space. For this particular team they may not see the harm in overpaying for a position.

They could also consider the rarely used Transition tag allowing Mack to “get what he is worth” and then deciding if they want to match the offer. This tag will cost $1 million less than the Franchise tag and for the Browns no team could frontload a contract offer that they could not match since the Browns salary cap space is so high. The risk you run with that is losing a 3rd round max compensatory pick, but with so much money in cap space and holes to fill getting a compensatory pick could prove difficult. I’d personally prefer that option, but I guess we’ll need to wait and see what the Browns consider the optimal decision for Mack.

All Franchise Tenders are not created equal. The CBA has various rules in place for Franchise tag values. The numbers are dependent on exclusivity of the tag, position played, times being named the Franchise player, and prior years’ salary. In the case of Cromartie he falls under the category of prior years salary.

The Franchise tender information published by the NFL is the minimum amount that a Franchise player must earn. If his salary the year before is close to or exceeds the number he is entitled to 120% of his prior years salary. The loose definition of salary in this case would be salary cap number minus workout bonus.

For Cromartie his 2014 salary for the Franchise calculation is $14.78 million. That number is made up of a $4.3 million dollar base salary, $5 million dollar roster bonus, and $5.48 million in prorated dollars. That makes his 2015 tag value equal to the number from Manish’s article. At those kind of cap numbers it is highly unlikely that he would be on the Jets, which is why the Jets will either extend him after this season or trade or cut him before his roster bonus is due in March of 2014. The Jets had restructured his contract in 2013 for cap relief but took a cautious approach and did not consider extending him despite the down market at the position.

Beyond Cromartie though that got me to thinking about players in the final year of their contract this season that could see their Franchise tenders be so high that the tag is not even an option for the team. Digging through my lists these were the names and approximate tag figures I have for the players (that means there is always a chance for a mistake) that I thought might make someone think twice before applying the tag. In the case of Anthony Spencer his tag will actually be that of a Quarterback because this is his third time tagged, so his real value is higher than this. I believe Vinatieri only played on the tag once in New England. If it was twice he may also be able to earn the QB tag value.

The NFL calendar is filled with little dates here and there that are very important for salary cap purposes that sometimes get lost in the shuffle. We are now coming up on one of those dates- July 15, just 9 days away from the time I am writing this. July 15 is the final day that a team can sign their Franchise player to a long term contract. If they fail to come to a contract agreement by 4:00 PM on the 15th the player can only play the season on a one year contract with his current team with no extension allowed until after the conclusion of the season.

I am not a big fan of allowing players to play out the season on the Franchise tag. It compromises your salary cap and puts you right back at square one after the season. Normally when you tag a player the players is an exceptional player and when his contract is up for extension again the following season he is still an exceptional player. His value doesn’t go down it is only going to go up.

Obviously drafting skilled players and hiring the right coaching staff are two major factors in team success, but much of a team’s success, specifically long term, is predicated on efficient and effective contract management. The prime years for most NFL talent is between the ages of 26 and 29. The longer past the age of 30 a contract runs and the more dead money linked to those post 30 years the more compromised a team becomes in the future.

The problem with tagging a 26 or 27 year old player rather than signing a 5 year extension that runs until he is 30 or 31 comes at both the front end and back end of the contract. For example Anthony Spencer of the Cowboys had proven himself to be a pretty solid player thru 2011. Dallas had him play the year out on the tag in 2012, when he had just turned 28. Spencer did nothing to decrease his value as he is playing in the prime of his career, and if anything increased his value in free agency.

Rather than locking him up at 28 years of age the cap-strapped Cowboys put $8.85 million on their cap instead of using the benefits of proration and contract management to limit the cap obligations on the front end. Now 29 the Cowboys have tagged him again, this time at $10.63 million, contributing in part to the execution of a string of bad contract restructures to be cap compliant in 2013.

The Cowboys, who have called off negotiations with Spencer this season, supposedly still want to do a long term deal after this season. Assuming they do so they will have paid Spencer around $19.5 million in cash and cap for 2012 and 2013 and will now be stuck in a contract with him until 34 or 35 years old, with him likely earning the same deal and guarantees he would have earned back in 2012 with the Cowboys having an option to release at 31 years of age.

The only times the franchise tag is acceptable, in my opinion, is if you have a question mark “one season wonder” or it is an player on a win now team that has no intentions of ever re-signing the player to a long term deal. When the Carolina Panthers tagged Matt Moore it made sense because he was totally unproven and as things turned out he was pretty bad in a starting role and ended up as a backup in Miami. The tag saved Caroline a ton of money. The New York Jets tagging of John Abraham in 2005 fit the second criteria, and helped the team control his rights to collect a first round pick for a player they had many reservations about keeping.

Our look at the positional Franchise players who could get deals done this week:

Branden Albert– Albert will turn 29 during the course of the 2013 season and the Chiefs really shot themselves in the foot by franchising him for the sole purpose of trading him. When they failed to accept what the market would offer they got stuck with a $9.8 million dollar cap charge on a player they don’t really want. Albert is versatile and you can get a few extra years out of that position than some others, but considering where both sides are it probably serves no purpose for the Chiefs to sign him long term, though the cost of the tag has hurt their cap flexibility with the season approaching.

Jairus Byrd– Byrd is 27 years old and one of the best two or three Safeties in the NFL. Bills could be thinking that two years of tagging at a low cost position rather than paying $8 million a year for top end of the market is worthwhile, especially on a team that should experience some defensive turnover in the next year or two. That would cost the Bills an extra $4 million in cap but save them about $4 million in cash over a two year period if benchmarking against Eric Weddle in San Diego. The Bills should extend him but my guess is they will not.

Ryan Clady– Clady is another 27 year old and a 3 time Pro Bowler. The cost of franchising an offensive lineman is high- $9.8 million, but finding a fair value contract for any lineman is difficult. The Broncos are built to win now and may perceive investment at the position not worth the long term cost. I think the decision should be made in part based on how many years the team expects Peyton Manning to start. Considering his salary in 2014 is fully guaranteed it puts Denver in a position to play the tag game again next year as its doubtful they will throw a rookie in at LT with Manning. As a point of reference Jake Long will only cost the Rams $13.5 million in cap over the next two years and an additional $10.5 million if they keep him in the third season. I have not heard anything about discussions between the two sides and they may be financially too far apart, but he is a player that should be signed long term.

Michael Johnson– A head scratcher. The Bengals have no cap issues and Johnson has produced 17.5 sacks over the last two seasons and is a vital part of the defense. He is only 26 years old and would give the Bengals a head start on extending a core of young players that can get very expensive n a few years. They should extend Johnson but may balk at Johnson looking for premier pass rusher money while the market for pass rushers has somewhat shrunk, though none as young as him. The Bengals should work hard on locking him up as the cost to franchise next season if prohibitive.

Henry Melton– Melton has produced 13 sacks the last two seasons and won’t turn 27 until October. Right now the Bears have limited long term visions with a number of high priced contracts set to expire. In many ways you can say the Bears have a cap filled with franchise tags based on the cost, lack of dead money, and remaining seasons on the contract. Paying a DT on the tag is almost worthless due to the high cost compared to positional value. Bears should have never even tagged him in the first place. Based on everything the Bears are doing they are likely just giving one last shot with this group and will let Melton walk after this season.

Anthony Spencer– We discussed Spencer above and the Cowboys have really just botched this from day one. Their best option at this point would be to see if a team was willing to trade for Spencer. Dallas always has an inflated view of themselves and I am sure see themselves as a win it all this year type of club which will be the justification for keeping him this year on the franchise tag.

Randy Starks– Starks will be 30 towards the conclusion of the season and already has nine years of wear and tear on his body. The Dolphins clearly went all in on the season making the retention of Starks very important to the team. He is a solid player for a somewhat underrated defense and should be a key contributor in 2013. At his age a long term extension is really not a wise decision. Older players at this position often end up on lower cost one and two year deals and the Dolphins could look to that model for the future if the market dries up for him next year. He is one of those rare players where it makes more sense to play on the tag then extend, and I fully expect Miami to hold firm on Starks this year.

And I think that’s what you’re seeing when people are saying [there’s] a little buyer’s remorse. It’s because we’re expecting a lot more money on the veteran end, and it’s just been hard. We haven’t seen as much of it as we thought we would have.

This quote was in reference to the acceptance of a rookie wage scale that was designed to put the money back into the pockets of the veteran players. There were numerous problems with that line of thinking. First and foremost was the fact that whatever projections were being made on the end of the union failed to realize just how much the new deal was going to limit the growth of the salary cap. Veteran players had grown accustomed to a cap that was skyrocketing around $6 million per year. I detailed the effects when looking at the great market correction of 2012, but here is the graph that shows the projected growth of the old CBA vs actual growth in the new CBA:

That is a load of difference in spending money for teams. Not only that but the new CBA numbers include a ton of funny money where owners are allowed to keep millions of dollars in players “performance based” earnings to help lessen the reduction of dollars going to active contracts.

To think that the rookie salary reductions would make this up is ridiculous. The overall reduction in rookie pool money on an APY basis between 2010 and 2013 is around $30 million total, less than $1 million per team. The reason its so small is because the rising minimum salaries and flat signing bonuses of the non first rounders offsets half of the gain in the first round. Even on a 1st round basis the savings are only around $1.8 million per team on a leaguewide basis. To believe that this would offset $20 million in lost cap room due to the new accounting methods is unrealistic.

The decision to remove the salary cap floor from the new CBA and replace it with a cash floor was a short term mistake. Long term we shall see, but with no penalties for failure to spend over a 4 year period other than paying money back 4 years down the line has now left a number of teams to do nothing but sit on cap space. Five teams are carrying more than $20 million in cap room and most of those teams are not spending money in cash on their players so its not an accounting trick. Its sacrificing todays players, who may have gotten paid with a cap floor, for future contracts in 2015 and 2016 where they make up the difference, saving the money for a star QB or other player to come off his low cost rookie deal. Sure there were tricks in the old CBA to use up cap room without paying money, but the NFLPA needed both cash and cap minimums per team to keep their veterans from completely falling by the wayside.

So for most positions this got the owners exactly what they wanted which is control over costs and more importantly control over the players. There is almost no possibility that the franchise tag can grow as quickly as it did under the old system which at least gave the players some leverage in negotiations. Over time we are probably going to see a scenario where more teams start using the tag on the positions that they were hesitant to in the past because of the price associated with it. Another new and interesting aspect to offseason planning in the NFL

Maybe some of it has been unrealistic for the union to project but most fans would have told you that regardless of what the salary cap is there was always going to be one or two positions that is an overpaid positions. About a decade ago it was the running back and left tackle Now its the quarterback and wide receiver. The difference is under the old system overpayment was reasonable because the cap grew. Now its salaries whose growth far outpaces the growth of the cap. Where does the difference come from? All the other positions on the team that have been de-valued.

While nobody is going to cry over players who make millions most of the players in the league dont earn that kind of money. I look at a player like Matt Slauson, a good quality guard that worked to become a starter with the Jets, who should have at least gotten a contract that gives him a little financial security for two years. Instead he had to settle for a 1 year deal that is great money for a guy like me but peanuts compared to what players like him earned 2 and 3 years ago. Not only that but now teams are going to get to hold his performance based pay for two years rather than giving it to him when he earns it so the union can artificially pump up cap space. Unfortunately his story is becoming the norm and it shouldn’t have been that way.

Slowly but surely we are catching up with all the moves of the last few days. I already went over the latest Atlanta Falcons roster changes earlier today so lets look at what else went on around the league.

Arizona– The Cardinals released disappointing ILB Stewart Bradley after just two years into his five year contract. With Bradley’s guarantees out of the way he made for an easy release. CB William Gay likely had too high of a salary, $3.225 million, to possibly remain on the team. Gay earned a large escalator last season for his play and that probably led to his release. I could see Gay back on a lower cost contract. he Cardinals will save $3.5 million with the release of Bradley and $3.35 million with the release of Gay.

New England– Both Spencer Larsen and Kyle Hix spent 2012 on Injured Reserve and the Patriots seemed to have no place for them in 2013. Neither move brings much in cap relief for the team as this was a pure football related cuts.

Carolina– The Panthers still have a little work to do to reach the cap threshold but they got a little closer with the release of DT Ron Edwards, freeing $2.5 million in cap room. They also restructured the contract or Greg Olsen. Hopefully by Monday I can get some more concrete details on it.

Buffalo– S Jairus Byrd got the franchise tag designation from Buffalo which had been expected to occur for weeks. Byrd will count for $6,916,000 in cap charges while tendered.

Indianapolis– The Colts used the franchise tag on P Pat McAfee at a price of $2,997,000.

Cincinnati– It was common knowledge that the Bengals were going to tag someone this year and that person was DE Michael Johnson. The other option was RT Andre Smith, but if they value him as a right tackle the franchise tag is too high for that position and compromises their leverage in negotiating a new contract. Johnson just makes more sense. His franchise tag cost is $11,175,000

Denver– While not official there have been plenty of reports on Twitter that it happened and Clady had already said it was known he would get the franchise tag. The cost for Clady is $9,828,000. Ill get him on the site as soon as it is officially official